Burberry's First-Half Revenue Rises 6% to £1.1 Billion as Margin Recovers

Burberry posted a 6 percent rise in first-half revenue to £1.1 billion, with adjusted operating profit more than tripling to £62 million for the six months to Sept. 26. The British brand reported profit of £54 million, reversing a loss of £18 million a year earlier. Adjusted operating margin reached 5.7 percent, helped by supply chain tightening and cost control.

Comparable retail sales rose 4 percent in the first half and the second quarter — the fifth consecutive quarter of growth under the Burberry Forward turnaround led by chief executive Josh Schulman. Full-price transactions outstripped outlet sales, which the company credits for the margin improvement.

Where is the growth coming from?

Wholesale revenue jumped 17 percent in the half, beating guidance. Burberry now expects the channel to grow 10 percent to 12 percent for the full year, driven by Bloomingdale's, Nordstrom and Exemplar Luxury Group, formerly Saks Global. Wholesale represents roughly 12 percent of revenue, and Schulman has been trimming the roster to focus on top performers.

The Americas grew 12 percent, led by local customers and VIC engagement programs. China rose 7 percent in the half and 5 percent in the second quarter. Asia-Pacific was up 3 percent. EMEIA fell 2 percent, the only declining region, hurt by reduced tourist traffic, particularly in the outlet channel.

Bernstein's Luca Solca noted the 4 percent retail comp beat consensus of 3.2 percent — "almost as good as Hermès, and 9 percentage points better than LVMH's Fashion & Leather Goods division in the same quarter." He attributed China's outperformance to "local spend and intraregional tourism, reflecting a strong brand positioning, localization and execution."

What did Schulman tell analysts?

Schulman described the quarter as one of "outperformance in a challenging macroeconomic environment" and said "there has never been a better time to be Burberry." He positioned the brand in a "sweet spot" between Ralph Lauren's 300-plus outlet stores and Hermès' $15,000 handbags, citing democratic pricing and outerwear authority. On China, he told analysts: "You should never underestimate the resilience of the Chinese consumer."

All major categories grew, with outerwear up double digits. Leather goods accelerated in the second quarter after campaigns for the B Clip bag and the new Cotswolds and House Check families. "We have a sweet spot around 2,000 pounds, and those bags are doing well for us," Schulman said, adding that handbags and shoes now attract new customers alongside rainwear. He stressed Burberry "will never be a leather goods-driven brand" but sees "significant potential" in cashmere, with pop-ups, scarf bars and "trench arcades" planned for shop floors.

The Palace capsule sold out "within hours" at Palace's Soho store, and Daniel Lee collaborated with illustrator Celia Birtwell on spring 2027.

What changes at the top and on Regent Street?

Thursday marked new chair William Jackson's first day. The Bridgepoint Group founder, who joined Burberry's board as a non-executive director on July 1, replaces Gerry Murphy after nearly nine years. "Today is the last step in the handover, and we're thankful to Gerry for his stewardship and leadership, and excited to work with William," Schulman said.

Schulman also addressed Frasers Group, which cut its stake to 6 percent from 7.42 percent. He called Frasers — now holding Burberry within a new luxury division alongside Harvey Nichols and The Webster — one of the most important U.K. wholesale customers. "We will be meeting with them, as we do with all investors. We're pleased they see value in Burberry," he said. A full takeover appears unlikely given Burberry's £4.23 billion market capitalization.

Investors sent shares up 6 percent to close at £11.63 on Thursday.

Capital plans include investment in the Yorkshire trenchcoat factories and a major transformation of the Regent Street flagship next year into "Burberry House," the first store to carry the new Regent Concept design language created with interior designer Peter Mikic. A Shanghai exhibition, "Ever Forward: The Archive on Stage," follows in December to mark the brand's 170th anniversary, as Burberry banks on China's long-term potential.